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Ei Group posts higher annual sales, points to good start to year

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By Reuters

(Reuters) – Pub operator Ei Group Plc <EIGE.L>, which has agreed to be bought out by Slug and Lettuce pub chain owner Stonegate, on Tuesday posted higher full-year underlying revenue on growth in its publican partnerships division.

The operator of about 4,000 pubs in the UK reported a 4.2% rise in underlying revenue to 724 million pounds ($938.23 million) for the year ended Sept. 30.

“The trading performance of our portfolio of businesses, together with the transfer of assets into alternative operating models, is progressing in line with our expectations,” the company said.

British restaurant and pub operators have had to cope with lower consumer spending and higher expenses, most notably from wage inflation and property costs, following Britain’s vote to leave the European Union.

Britain’s plan to raise the minimum wage to 10.50 pounds an hour was endorsed by an independent review earlier this month.

Companies are now likely to see wage costs rise after next month’s snap national election, further affecting expenses at restaurants and pubs.

Subject to approval by the competition watchdog, the company expects the Stonegate deal to close in the first quarter of 2020.

Stonegate, which is owned by private equity fund TDR, is best known for its Walkabout, Yates and Slug and Lettuce chains.

In contrast, Ei runs a disparate range of pubs, often in partnership with landlords and small operators, who tailor their menus and entertainment to cater to local customers.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shounak Dasgupta)